If you want to get a sense of the potential of India's car industry, count the country's motorbikes. Buzzing along Mumbai's crowded highways, standing outside modest homes in rural villages or packed into the parking lots of Bangalore software firms, motorbikes and scooters currently outsell passenger cars by more than six to one. As the country's booming economy pulls millions of people into the middle class, the first vehicle most people buy has two wheels, not four.

That may be about to change. Around the middle of next year, Indian automobile manufacturer Tata Motors...